Q1: Which of the following liabilities results from amounts owed by both the employee and the employer?

a) employee income tax payable

b) wages payable

c) employment insurance payable

d) vacation pay payable

Q2: When capitalizing the cost of a purchased asset, all of the following cost should be included in capitalization except for

a) the full purchase price less any discounts.

b) set up costs.

c) legal costs.

d) shipping costs.

Q3: The premium on a bonds payable account is initially

a) added to the carrying value of the bonds payable.

b) deducted from the carrying value of the bonds payable.

c) added to the face value of the bonds payable.

d) deducted from the face value of the bonds payable.

Q4: Which of the following companies would usually not have an unearned revenue account?

a) magazine publishing company

b) property management company

c) airline

d) hardware store

Q5: Which of the following statements regarding preferred dividends is not true?

a) Preferred dividends are added to net income in the calculation of earnings per share.

b) Preferred dividends are paid out before common dividends.

c) Preferred dividends are normally fixed.

d) Preferred dividends must be declared by the companys board of directors.

Q6: Blended payment loans require a loan amortization schedule separating principal and interest. This is required, in part, because

a) interest only is reflected on the cash flow statement.

b) interest and principal needs to be reflected under current and not current liabilities section of the statement of financial positon.

c) the interest expense is recorded separately from the reduction of the loan payable.

d) none of the above.